Recession to last through 2009, chief financial officers warn in Duke survey
Pessimism among chief financial officers worldwide is the worst in the 12-year history of the Global Business Outlook Survey. A majority of executives say their firms will cut jobs, slash spending.
Posted — UpdatedAs a result, most CFOs said their companies would cut jobs, slash spending and incur financial losses.
“Throughout the history of our survey, CFOs have shown remarkable ability to predict future economic conditions,” said John Graham, the director of the survey and a finance professor at the Duke Fuqua School of Business. “Therefore, the record pessimism CFOs are currently expressing is ominous. Eighty percent of U.S. CFOs have grown more pessimistic about the economic outlook for 2009, and pessimists outnumber optimists by a 9-to-1 margin.”
Little positive news could be found in the Duke/CFO report, however. And Michael Walden, an economist at North Carolina State University, said the survey didn’t surprise him.
“The poor sentiment about the economy expressed by CFOs is in line with forecasts for a challenging business climate in 2009,” he told WRAL.com. “Concerns about credit access, policy direction, and consumer buying are all worries we would expect when the economy is in a deep recession.”
“One interesting aspect I noted was the expected 10 percent cut in capital spending but only 4 percent cut in technology spending,” he said. “This further indicates the increasing importance of technology in the globalized economy – that CFOs are trying to protect this component of their inputs even in the face of extreme uncertainty.”
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